CBN sells N1 trillion OMO Bills
CBN sells N1 trillion OMO Bills
By holding Open Market Operations (OMO) auctions and selling N1.06 trillion in notes, the Central Bank of Nigeria has stepped up its efforts to control the amount of money in circulation.
Investor interest was strong, as evidenced by the N1.14 trillion in subscriptions, which exceeded the amount of bills sold.
The central bank, which works to combat inflation and stabilize the currency rate, set a record when it sold these bills at an all-time high of 21.5%.
With respective ratios of 2.28x and 1.08x, the subscription-to-offer and bid-to-cover were both very remarkable.
The 95-day bill had a stop rate of 19% and N37.05 billion was sold out of the N75 billion that was made available. It sold for the full N37.05 billion that was up for grabs.
Even though the 179-day bill was only offering N75 billion, only N8.25 billion was subscribed, with a 19.5% stop rate and just N6 billion sold.
With N1.09 trillion in subscriptions versus an offer of N350 billion, the 361-day bill had the highest demand.
These bills, with an interest rate of 21.5%, were sold by the central bank for N1.013 trillion.
The 364-day Treasury Bill, which the central bank recently sold for N2.5 trillion, was selling for 19% annually.
The central bank’s diligent approach to managing liquidity in the economy is evident in its robust OMO auctions.
It attempts to absorb surplus money production by selling bills at high interest rates, which is essential for containing inflation and bolstering the value of the currency.
The central bank’s dedication to attracting international investors to Nigerian assets and attracting capital that can support financial market stabilization is further demonstrated by the high interest rates.
The variation in subscription levels throughout different bill tenors, however, points to differing investor expectations and confidence over the nation’s economic prognosis.
